The rich around the world have big ambitions for sustainable investing – the kind of portfolios that help fight climate change or solve societal problems. The reality is more complex.
Investing sustainably is one of the hottest trends in finance, a trend that has only been accelerated by the coronavirus pandemic.
Global funds targeting ESG attracted record inflows last year, according to Morningstar. BlackRock Inc. and Vanguard Group Inc. are committed to reducing the net greenhouse gas emissions of their portfolios to zero. And some of the best performing investments have been linked to the green economy like Tesla Inc. or Chinese battery makers.
Read more: Climate billionaires: Elon Musk at the top
It can be difficult to execute, however, even for some of the wealthiest people on the planet. Bill Gates decided to disengage from fossil fuels in 2019, but the current process of unraveling the world’s third-largest oil and gas fortune takes years – and hasn’t stopped Gates from investing in other companies. with high carbon content.
It is also a challenge when considering private equity or hedge fund investments, where a third party manager may not adhere to the same standards. Meanwhile, cryptocurrencies have a difficult relationship with the climate. The University of Cambridge estimates that mining – the computerized puzzle solving necessary to verify all Bitcoin transactions – consumes around 144 terawatt hours of electricity per year.
The HSBC and Core Data study results follow a survey conducted by UBS Group AG last year that showed the new generation of the wealthy prioritize financial returns over wellness strategies, just as much as their parents did.
Still, nearly half of those polled in the new study predict that their portfolios will be fully sustainable over the next three to five years.
“As investors find ways to put their principles into action, it is promising that almost half want their portfolios to be entirely made up of sustainable investments,” said Nicolas Moreau, managing director of the business unit of assets of HSBC Holdings Plc. “The gap between investor intentions and their actions also indicates a strong growth path for sustainable investments.”
More than two-thirds of survey respondents said they were also interested in investments that will help economic recovery from the Covid-19 crisis.
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This notice was published: 2021-04-15 03:41:01